US tractor builders vs. Japan: plowing different furrows

While Japanese carmakers impose so- called "voluntary quotas" upon themselves , their farm tractors continue to plow fertile ground in the United States. But American tractor manufacturers appear unruffled. The lack of ill will stems from American and foreign builders' specializing in differing tractor sizes. In this way, they avoid head-to-head competition.

US manufacturers concentrate on agricultural tractors of 80 horsepower and above. European and Japanese producers assemble the smaller machines used for farms and gardens.

"The No. 1 thing to keep in mind," said Emmett Barker, president of the Farm and Industrial and Equipment Institute, a trade organization in chicago, is that "we export more farm machinery than we import.

"The second thing to remember," Mr. Barker said, "is that the major importers are the domestic companies themselves. Tractors are manufactured for them overseas for resale here under their brand names."

Mr. Barker noted that American tractormakers round out their sales lines by having their subsidiaries build the less powerful tractors abroad, or by buying foreign- made models under contract and placing their nameplates on them.

In either case, the tractor is chalked up as an import statistic which can be misleading, he said.

For instance, John Deere's five models, ranging from 14.5 to 33 hp., are manufactured under contract in Japan. Its three models from 41 to 81 hp. are shipped from its West German subsidiary.

In addition, some foreign producers, such as Kuboto, Japan's No. 1 tractor builder, have set up their own dealer network to sell their machines in the US.

Consequently, the number of imported farm tractors has ballooned from 22,000 units in 1975 to 77,000 units in 1980, according to Ron DeMarines, an International Trade Commission commodity analyst.

At the same time, he said, US production dropped from 187,000 units in 1975 to 124,000 in 1980.

In 1975 imported tractors garnered about 10 percent of the US market. Last year they cornered about 33 percent.

The Japanese have been particularly effective in capturing the under-40-hp. segment of the market. As a result, the island nation increased its share of import sales from 10 percent to 55 percent between 1975 and 1980, Mr. DeMarines said.

US manufacturers are uncomplaining because they earn more profit selling a 160-hp. tractor costing $50,000 than a 60-hp. unit retailing for $20,000.

"What has already evolved is a worldwide farm machinery market," said Barker. "Our people fell that as long as competition is fair, there is no problem."

American companies have built larger and larger tractors over the past several decades, with the trend most pronounced in the last 10 years, to keep pace with the realities of farm economics, he said.

Economic conditions have forced farmers to seek greater productivity and efficiency, he explained, and one of the ways to achieve them is by using more powerful tractors.

"In order to maintain financial viability, the farmer has had to substitute capital for labor," Barker said. "He has had to buy bigger pieces of farmland and work it with larger pieces of equipment.

"Before, a man could plow one acre an hour. Today he can plow six acres an hour."

But that paved the way for the growth of imports in the smaller tractor sizes , according to Norm Sharp, membership services director of the Outdoor Power Equipment Institute in Washington, D.C.

"A whole new category opened up when American manufacturers abdicated the smaller ranges," Mr. Sharp said.

The current domestic-vs.-imported-tractor standing is recalls a similar situation with motorcycles 20 years ago, he added.

"American motorcycle manufacturers at one time avoided making the smaller motorcycles . . . ," he said. "They felt people wanted big motorcycles, but the only people riding motorcycles were 'bikers.' It took Honda to come in and make motorcycle riding respectable."

Similarly, not all farmers need mammoth machines beneath them. A grower with orchards or vineyards, for example, requires an intermediate-size tractor, able to maneuver between the trees or vines.

Another factor in the spurt of imported tractor sales is the sundown farmer movement, Sharp said.

The sundown farmer, also called the weekend or hobby farmer, is the grower with a small plot of land who earns his living at another job or profession. He farms to provide food, relaxation, and sometimes a tax shelter. Such farmers do not need, nor can they afford, the huge tractors rolling off American assembly lines, Sharp said.